DO THE EFFECTS OF THE FAIR VALUE CONCEPT APPLIANCE AND CORRESPONDING DEFERRED TAXES STRONGLY AFFECT THE COMPANY’S FINANCIAL POSITION AND PERFORMANCE? – EVIDENCE FROM CROATIAN COMPANIES FROM REAL SECTOR

This paper aims to identify the impact of the effects of the fair value concept application and corresponding deferred taxes on the financial position and performance of the large Croatian companies from the real sector in the period from 2010 to 2019. The impact of the effects of the fair value concept application and corresponding deferred taxes on companies’ financial position and performance is analysed using the descriptive statistical methods and multiple linear regression. Based on the results of regression analysis, it could not be confirmed that the changes in fair value and corresponding deferred taxes have a statistically significant effect on the financial position of the large Croatian companies in the real sector. The results of regression analysis also indicated that the changes in fair value recognized in the income statement have a statistically significant effect on the financial performance of the large Croatian companies from the real sector while the corresponding deferred taxes do not have. Therefore, the results of this re- search suggest that by applying the concept of fair value, the management of the large Croatian companies in the real sector can significantly affect the financial performance of the company, but not the financial position of the company. Furthermore, deferred taxes associated with the effects of the fair value concept application do not significantly affect the financial position and performance of the large Croatian companies from the real sector.